Description of this paper

Question;Which of the;following would decrease the NPV of a project being considered, other things;held constant?;A. A decrease in;the cost of capital for the project;B. A decrease in;net working capital in year 1;C. Making the;initial investment in the first year rather than spreading it over the first 3;years;D. All of the;above would increase the NPV of a project;E. A shift from;straight line to MACRS depreciation method;Your company is;considering a new project whose data are shown below. The required equipment;has a 3-year tax life, and the MACRS rates for such property are 33%, 45%, 15%;and 7% for Years 1 through 4. Revenues and other operating costs are expected;to be constant over the project's 10-year expected operating life. What is the;project's Year 4 cash flow?;Equipment cost;(depreciable basis) $70,000;Sales revenues;each year $42,500;Operating costs;(excluding depreciation) $25,000;Tax rate 35.0%;A. $14,432;B. $13,090;C. $11,814;D. $12,436;E. $13,745;Falcon Ski;Corp.has the following data, in thousands. Assuming a 365-day year, what is the;firm's cash conversion cycle?;Annual sales;$45,000;Annual cost of;goods sold $31,500;Inventory $4,000;Accounts;receivable $2,000;Accounts payable;$2,400;A. 31 days;B. 35 days;C. 38 days;D. 28 days;E. 25 days;Firms U and L;each have the same amount of assets, investor-supplied capital, and both have a;return on investors' capital (ROIC) of 12%. Firm U is unleveraged, i.e., it is;100% equity financed, while Firm L is financed with 50% debt and 50% equity.;Firm L's debt has an after-tax cost of 8%. Both firms have positive net income;and a 35% tax rate. Which of the following statements is CORRECT?;A. Firm L has a;lower ROE than FIrm U.;B. Firm L has a;lower ROA than Firm U.;C. Firm L has a;higher times interest earned ratio.;D. Firm L has a;higher EBIT than Firm U.;E. The two;companies have the same times interest earned ratio.

Paper#47751 | Written in 18-Jul-2015

Price : $22

STUDENTS MERIT

CLIENTS’ SUPPORT

MAKE MONEY

CONNECT WITH US

Disclaimer : Studentsmerits.com provides solutions that are custom written and that can only be used for research and reference purposes only. Using this service does not contravene your academic honesty or insititution\'s policies. The following are the ways you are supposed to use our services: (i) As a reference for indepth understanding of the subject. (ii) As a source of ideas / reasoning for your own research (if properly referenced). (iii) For editing and paraphrasing (check your institution\\\'s definition of plagiarism and recommended paraphrase). (iv) Direct citing (if referenced properly).